SPIKE IN PIRACY: Nigerian Pirates Fingered As Insurers Increase Premium On Ships Sailing Into Gulf Of Guinea

Following an increase in attacks on ships and kidnap for ransom in the Gulf of Guinea beyond Nigeria’s exclusive economic zone (EEZ), the Joint War Committee has redrawn previously existing listed extended risk area in the West Africa region.

Specifically, the Joint War Committee, which is a body of global insurers has expanded its Gulf of Guinea listed area further south and east following an uptick in piracy attacks.

However, global insurers have blamed the development on activities of Nigerian pirates whom they have credited with attacks beyond Nigeria’s Exclusive Economic Zone.

The Joint War Committee comprises of underwriting representatives from both the Lloyd’s and others who represent the interests of those who write marine hull war business in the London market.

The JWC’s listed area, which was last changed in 2013 and previously covered only the exclusive economic zones of Togo, Benin and Nigeria.

Apparently reacting to the soaring attack on ships and subsequent kidnap for ransom, the JWC last week updated the listed areas and have now extended it between Lome, Togo to about 340 nautical miles west of Cape Lopez and Gabon.

According to the International Maritime Bureau (IMB), violent attacks against ships and their crew rose in the first half of 2020, with 77 seafarers taken hostage or kidnapped for ransom. This is against the 78 of such recorded in the same period in 2019.

The IMB also added that, two-thirds of the vessels were attacked on the high seas from around 20 to 130 nautical miles off the Gulf of Guinea coastline. 

Blaming the spikes on Nigerian pirates, experts said last week that, “there are a number of historical reports and incidents of Nigerian pirate groups operating at long range and in deep waters beyond Nigeria’s Exclusive Economic Zone (EEZ), but what’s become apparent is that their area of operations has expanded in the past year”.

The maritime security threat within the Gulf of Guinea isn’t restricted to Nigeria’s EEZ and as the industry well knows, maritime piracy doesn’t adhere to the mapping constraints of conventional national geographic and maritime borders”.

 “The principle driver of such incidents is the relative lack of effective enforcement in waters of neighbouring Nigeria. In addition, pirate action groups seek to capitalise on the opportunities that lie beyond Nigeria’s EEZ where vessels are less likely to be hardened against attack”, the report added.

The new Listed Area now allows underwriters to charge more to cover vessels that travel through the region because ship owners who are required to sail in the Gulf of Guinea will have to obtain the approval of their insurer before they can enter these waters.

Giving an insight into the change, Mr Chris Goddard, a leading underwriter of Marine War risks said that, additional premiums have increased in 2020 due to a proliferation of piracy in West Coast Africa in both the Marine War and Kidnap and Ransom market.

“The expansion of the Gulf of Guinea notification area is in direct response to the broadening of sustained attacks in the region which began increasing in 2019.

He confirmed that, “the JWC’s decision will increase costs for ship owners operating in the region”.

“However, those who widely adopt best management practice and engage in risk mitigation measures such as transit risk assessments conducted by independent maritime security experts will continue to see preferable insurance terms over their peers.”